Exhibit 99.1
(PolyOne Logo)
NEWS RELEASE
FOR IMMEDIATE RELEASE
POLYONE TO SELL ELASTOMERS & PERFORMANCE ADDITIVES BUSINESS
TO LION CHEMICAL CAPITAL AND ACI CAPITAL
CLEVELAND - June 29, 2004 - PolyOne Corporation (NYSE: POL) announced today that
it has signed a definitive agreement to sell its Elastomers and Performance
Additives business to an entity formed by an investor group led by Lion Chemical
Capital LLC and ACI Capital Co., Inc.
The purchase agreement provides that PolyOne will receive gross proceeds before
associated fees and costs of approximately $120 million, of which $106 million
will be paid in cash and $14 million in the form of a note from the buyer. This
price is within the range of estimates that PolyOne had anticipated for the sale
of the Elastomers unit.
The transaction, which is expected to close in the third quarter, is subject to
customary closing conditions and the buyers' receipt of their financing.
The Elastomers and Performance Additives business is a leading merchant provider
of customized, high-performance elastomer materials and additives for use in
diverse end markets, including the transportation, electrical, industrial and
printing industries. Headquartered in Solon, Ohio, the group operates five
manufacturing facilities in the United States and one each in Mexico and the
United Kingdom. Its first rubber compounding facility in China is slated to open
near Shanghai later this year. Revenues for the four quarters ended March 31,
2004, were $349 million, which represents 13.5 percent of PolyOne's total sales
from both its continuing and discontinued operations during that period.
"This action represents significant progress toward our announced goals to focus
on our businesses with the greatest synergy and to improve our balance sheet,"
said Thomas A. Waltermire, president and chief executive officer. "Our
Elastomers business unit is the largest of the businesses we targeted for
divestment late last year. We are satisfied we have negotiated a fair value, and
we plan to apply the proceeds to debt reduction."
"This business has the capacity and proven capability to grow, and we are
committed to its success," said Peter De Leeuw, managing director of Lion
Chemical and the prospective chairman of the new company. "We anticipate no
immediate change in business practices of the Elastomers unit, and no effect on
Elastomers customers, suppliers or employees. The unit's current management
team, headed by PolyOne Vice President and General Manager John E.
Quinn, will remain in place."
Added Ezra Field, a managing director of ACI Capital, "We are excited to have
the opportunity to make this investment, and we look forward to a successful
partnership with the company's management. We believe we are acquiring a
market-leading business at an attractive point in the business cycle."
PolyOne announced last October that, as part of its efforts to improve
profitability and strengthen its balance sheet, it would confine its strategic
emphasis to its Plastics Compounding, Color and Additives Masterbatch, and
Distribution businesses. These businesses have leading market positions, and
most of them are global in scope.
In line with this goal, PolyOne announced that it would divest its Elastomers
and Performance Additives, Engineered Films and Specialty Resins businesses. As
a result, the Company began reporting these business units as discontinued
operations in the fourth quarter of 2003. PolyOne has stated that it expects to
complete all three dispositions in 2004. The pending Elastomers divestment is
the first such disposition.
PolyOne Investor & Media Contact: Dennis Cocco
Vice President, Investor Relations
& Communications
440.930.1538
ABOUT POLYONE
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PolyOne Corporation, with 2003 annual revenues of approximately $2 billion, is
an international polymer services company with continuing operations in
thermoplastic compounds, specialty polymer formulations, color and additive
systems, and thermoplastic resin distribution. Headquartered in northeast Ohio,
PolyOne has employees at manufacturing sites in North America, Europe, Asia and
Australia, and joint ventures in North America, South America and Asia.
Information on the Company's products and services can be found at
http://www.polyone.com.
ABOUT LION CHEMICAL CAPITAL LLC
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Lion Chemical Capital is a private equity firm focused on investing in premier
businesses operating in the chemical and related industries. Lion leverages
its founders' extensive experience in the chemical industry, executive
management, private equity and investment banking. Target investments are
highly selective and possess key attributes such as market and technological
leadership and strong management. For more information, please visit
www.lionchemicalcapital.com.
ABOUT ACI CAPITAL CO., INC.
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ACI Capital is a private investment firm with nearly 50 years of history leading
middle-market management buyouts and growth capital investments across a broad
spectrum of industries throughout North America. ACI Capital makes equity
investments in profitable, market leading public and private companies,
partnering with management to increase value of their businesses. For more
information, please visit www.acicapital.com.
FORWARD-LOOKING STATEMENTS
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In this press release, statements that are not reported financial results or
other historical information are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements give current expectations or forecasts of future events and are not
guarantees of future performance. They are based on management's expectations
that involve a number of business risks and uncertainties, any of which could
cause actual results to differ materially from those expressed in or implied by
the forward-looking statements. You can identify these statements by the fact
that they do not relate strictly to historic or current facts. They use words
such as "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe" and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. In particular, these
include statements relating to future actions; prospective changes in raw
material costs, product pricing or product demand; future performance or results
of current and anticipated market conditions and market strategies; sales
efforts; expenses; the outcome of contingencies such as legal proceedings; and
financial results. Factors that could cause actual results to differ materially
include, but are not limited to: (1) an inability to achieve or delays in
achieving or achievement of less than the anticipated financial benefit from
initiatives related to restructuring programs, including cost reduction and
employee productivity goals; (2) a delay or inability to achieve targeted debt
level reductions through divestitures and/or other means; (3) the effect on
foreign operations of currency fluctuations, tariffs, nationalization, exchange
controls, limitations on foreign investment in local businesses and other
political, economic and regulatory risks; (4) changes in U.S., regional or world
polymer and/or rubber consumption growth rates affecting the Company's markets;
(5) changes in global industry capacity or in the rate at which anticipated
changes in industry capacity come online in the polyvinyl chloride (PVC),
chlor-alkali, vinyl chloride monomer (VCM) or other industries in which the
Company participates; (6) fluctuations in raw material prices, quality and
supply and in energy prices and supply, in particular fluctuations outside the
normal range of industry cycles; (7) production outages or material costs
associated with scheduled or unscheduled maintenance programs; (8) costs or
difficulties and delays related to the operation of joint venture entities; (9)
lack of day-to-day operating control, including procurement of raw materials, of
equity or joint venture affiliates; (10) partial control over investment
decisions and dividend distribution policy of the OxyVinyls partnership and
other minority equity holdings of the Company; (11) an inability to launch new
products and/or services within the Company's various businesses; (12) the
possibility of further goodwill impairment; (13) an inability to maintain any
required licenses or permits; (14) an inability to comply with any environmental
laws and regulations; (15) an inability or delay beyond December 31, 2004, in
finding buyers of discontinued operations or other non-core assets for
reasonable and acceptable terms; (16) an inability to access the receivables
sale facility as a result of breaching covenants; (17) any poor performance of
our pension plan assets and any obligation on our part to fund the Company's
pension plan; (18) any delay and/or inability to bring the North American Color
and Additives Masterbatch and the Engineered Materials product platforms to
profitability; (19) an inability to achieve anticipated earnings performance due
to the divestment of a non-core business prior to June 30, 2004; (20) an
inability to raise prices or sustain price increases for products; and (21) an
inability to complete the sale of discontinued businesses due to legal
proceedings, regulatory approvals and/or buyers completing financing for the
transaction.
We cannot guarantee that any forward-looking statement will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and inaccurate
assumptions. Should known or unknown risks or uncertainties materialize, or
should underlying assumptions prove inaccurate, actual results could vary
materially from those anticipated, estimated or projected. Investors should bear
this in mind as they consider forward-looking statements.
We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any further disclosures we make on related subjects
in our Form 10-Q, 8-K and 10-K reports to the Securities and Exchange
Commission. You should understand that it is not possible to predict or identify
all risk factors. Consequently, you should not consider any such list to be a
complete set of all potential risks or uncertainties. (Ref. #62804)
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